What is the maximum I can pay into my pension

funnymonkey

Good morning.
I'm selling my house so will have some funds soon and looking to top up my SIPP's.
I understand that the maximum that I can pay into a pension is £40k.
Does that equate to £30k by me and with the 25% I get from the government I get £10k, giving a total of £40k
Is this correct as I understand it?
Thank you

swindiff

Yes providing you earn at least £40k

funnymonkey

I earn about £25-30k
How would this affect this calculation?
Thank you

swindiff

You can only put into your pension up to 100% of your earnings each year. If you only earn £25k then that's all you can put into your pension, including the tax relief and any employer contribution.

funnymonkey

Thank you very much for your help Swindiff. Much appreciated

Dazed_and_C0nfused

Don't forget you will need to factor in the existing pension contributions made through your employment.

And the uplift is 25% of what you contribute not 25% of the gross amount.  So if you contribute say £16k this gets basic rate tax relief of £4k added giving you £20k in the pension fund (£4k being 20% of £20k).

Albermarle

Does that equate to £30k by me and with the 25% I get from the government I get £10k, giving a total of £40k

Although it is not relevant in your case ( as you do not earn enough) I have to correct the maths here.

25% of £30K is not £10 K , it is £7,500 .